Urgent help needed

2.

Chen at Chen Automotive purchases much of his stock from overseas. Some of these shipments take six months or more to get to him. Because of this long lead time, his vendors require a 60% deposit at the time of order, which is a significant dollar amount.

Up until now, hes been entering a bill for all the inventory items and paying 60% of the bill. He just fired his last bookkeeper and hired you to review and fix his books, if necessary, and advise him on correct procedures to use going forward.

Upon review, how should you recommend the prepayment be recorded?

• Create a credit memo for the prepayment upon receiving the final bill

• Enter a purchase order against accounts payable (A/P)

• Continue handling the prepayment in the same way

• Create a bill and post to Purchases Suspense Expense account until the inventory arrives and then reclass to Inventory Asset

• Enter a bill now for only 60% of the inventory and create a bill for the remaining 40% upon receipt of the items

• Set up a Vendor Prepayment account and post the initial payment against that account

3.

In which of these scenarios would a scheduled recurring transaction be the best automation option?

• When invoices are sent monthly to a customer for varying amounts and descriptions (including any unbilled charges)

• When there are pre-authorized payments to a cell phone provider for amounts that vary each month

• When sales receipts are sent monthly to a customer for fixed amounts and descriptions (and for any unbilled charges as well)

• When invoices are sent monthly to a customer for fixed amounts and descriptions (and for any unbilled charges as well)

4.

Your client, a landscaping company generally invoices their customers with seven-day terms. They just landed a job and have decided to ask for a deposit to pay for materials before conducting any work. The job will be completed within a month, and they want to know how to report the deposit without reporting income.

What process would you suggest to your client?

• Create a Deposits expenses account to allocate to, and then journal out when the invoice is created

• Use the Deposit feature to allocate directly to their sales income account

• Invoice the client as they normally would, and apply the payment to the invoice

• Use the Receive Payment screen to enter the deposit without applying to an invoice

Chen at Chen Automotive purchases much of his stock from overseas. Some of these shipments take six months or more to get to him. Because of this long lead time, his vendors require a 60% deposit at the time of order. It's a significant dollar amount. Up until now, he's been entering a bill for all the inventory items and paying 60% of the bill. He hired you to review and fix his books, if necessary, and advise him on correct procedures to use going forward. Which of these steps do you include in order to run a Vendor Deposits Outstanding report? O Create an other current liability account to track vendor deposits O Create an accounts payable account to track vendor deposits O Create an accounts receivable account to track vendor deposits Create an other current asset account to track vendor deposits